Hanwha Philly Shipyard (formerly Philly Shipyard) has agreed to pay $900,000 to settle a wage-related class action lawsuit filed by U.S. workers. The shipyard stated, “This settlement is solely a decision to avoid the risks, delays, and costs of ongoing litigation and does not constitute an admission of any legal liability or illegal conduct.”
According to a recent disclosure by the U.S. District Court for the Eastern District of Pennsylvania, Hanwha Philly Shipyard and the plaintiffs have filed a Preliminary Approval Application for Class Action Settlement, formally requesting the court to approve the agreement.
If the court approves the preliminary and final settlements, the lawsuit will be closed with a “dismissal with prejudice,” meaning the plaintiff cannot file another lawsuit on the same grounds, and the case will be completely terminated.
Under the settlement agreement, Hanwha Philly Shipyard will establish a $900,000 Gross Settlement Amount to be paid to the plaintiff. 33% of this settlement (approximately $297,000) will be used to cover the plaintiff’s legal fees and litigation costs.
The net damages of approximately $603,000, after deducting the plaintiffs’ attorney fees and litigation costs, will be distributed to the workers. The damages will be distributed proportionally to the employees’ actual working hours, specifically calculated based on the number of weeks during the corresponding period when each employee worked more than 39.5 hours per week. No further application from employees is required. The plaintiffs who led this class-action lawsuit will receive an additional $10,000 in damages.
It is understood that this class-action lawsuit stems from whether “commuting walking time” within the shipyard’s premises should be included in wages. The crux of the dispute lies in the plaintiffs’ demand that “commuting walking time” be recognized as formal working time.
Due to the large scale of Hanwha Philly Shipyard’s facility, hundreds of workers must walk considerable distances each morning after clocking in to reach the dry docks where they perform welding or assembly tasks. After finishing work, they must also spend additional time walking back to the exit.
Plaintiff alleges: From June 27, 2022, to December 11, 2025, employees were not fairly compensated for walking time within the shipyard before and after work. If “commuting walking time” is counted as working hours, weekly hours would exceed 40 hours, with the excess constituting overtime. Hanwha Philly Shipyard failed to pay corresponding overtime wages, allegedly violating the Pennsylvania Minimum Wage Act (PMWA).
This class action lawsuit covers approximately 752 employees who worked at Hanwha Philly Shipyard between June 27, 2022, and December 11, 2025.
In response, Hanwha Philly Shipyard stated: “We have paid employees in full for all accrued time compensation owed to them and does not admit any legal liability. However, to avoid potential future costs, inconvenience, and disruption to current business operations, we have decided to resolve this lawsuit through settlement.”
Notably, the class-action lawsuit currently facing Hanwha Philly Shipyard marks the first major legal dispute encountered by a South Korean shipbuilder entering the U.S. market. Previous reports have indicated that as South Korea’s shipbuilding industry increases its investments in the United States, such labor-related risks may also rise.